Borderline blow-back

When working with people, clarity of service is always important. The minute you start stretching the limits of service, mistrust sets in and cynicism takes hold. If you engage in clear, honest and transparent processes and offers, the people you are talking to you are far more likely to work with you. Transparency is not an option, its a requirement.

This was highlighted in my own mind yesterday when I went for consultation at a gym. I am looking to work out to tone up and improve my drumming performance and speed, so I went to a rather classy gym to discuss how they can help me. With it the equipment is well maintained, I get some regular personal training sessions to help meet my goals, and the entire place is that little bit more sophisticated than most gyms. As such, the membership weighs in at around Â£70/month – a pretty hunky chunk of wonga. This is fine in my mind though – they provide a premium service, and they charge premium rates. I have no problem paying more money for quality, but I demand that quality in return, and expect nothing less.

What did irk me though was two other fees:

Â£90 ‘joining fee’

Â£15 ‘administration fee’

I asked the fella who was giving me the sales routine what the purpose of the two fees were. He assured me the joining fee was because it is a members only club, and it secures a particular quality of clientele that ensures the club is members-only. Beard. Beard 2.0. The approx Â£70/month membership fee irrespective of this Â£90 will secure a particular quality of clientele and the organisation have already decreed it to be a members-only club, hence the elevated monthly price-tag. Regarding the administration fee, I queried how writing my details on a plastic membership card possibly warranted Â£15 of my hard earned cash. Apparently the administration process involves the membership card and registering me on their systems, hence the fee. Beard-a-mongus.

These two fees are nothing more than methods of squeezing more cash out of the punter – they are money-making devices to grab that extra bit of cash from a customer after they have decided to sign up. Up until these fees were mentioned I could mostly justify the higher monthly fee in my mind, but these two extra fees muddied the situation. The crazy thing is that the club clearly raises the monthly fee to only attract a certain demographic of people, and with this extra money that is raised you would expect that they could cover the costs of entering me into a computer without having to make me pay extra for the privilege.

The moral of this story is that people on the other side of the deal-making table make expectations, and by and large, these are reasonable expectations. When these expectations are compromised and it appears that you are spinning them a line, it can harm your community or business. What is worse than adding on these hidden extras is the rather feeble attempt at justifying them. The chap I spoke to was a nice guy, and did a great job at selling the place, but I think he even struggled in justifying these insane additional fees. And I don’t blame him. There is no justification.

Much of this hails back to effective usability, and this usability does apply to documentation and legislature in addition to devices, cars, televisions and lawn mowers. Small print, hidden extras, additional charges, hidden restrictions and other similar constructs are rarely put clearly in view – they are deliberately obfuscated so you don’t stop and think too hard about them. Elsewhere in the industry, usability plays a part in highlighting issues and problems so that they can be fixed, yet in the contact documentation world these things are merely included to cover the backs of the companies involved.

So, when building your community teams, always ensure the expectations and processes are (a) sane, and (b) clear. This will stop your users having the same kind of blow-back I got yesterday at the gym.

My gym (which was recently bought over so probably changed) appeared to have a signup fee mainly in order to allow them to waive it for almost everyone as part of very frequent special offers – I’d expect that a very small proportion of the people who signed up ever actually paid it.

It’s a buyer’s market: the gym boom has passed and they want any money they can get. Offer them less than a third the cash they have asked and tell them to waive any fees or you’ll pay that money to one of their competitors.

Its called a ‘two-part tariff’. It is an attempt to capture more of your ‘consumer surplus’, i.e. screw more money out of you than normal because there are not enough other places to go, giving you a deal bad enough that stay with it, but only just.

It occurs in lots of markets that do not have enough competition. Phone companies do it as well, charging for calls and line rental. What exactly do you get for your line rental? The phone lines were put in by the state years ago.

All of these markets tend to have artificial scarcity produced by the government’s mistakes or restrictions. Not too dissimilar to DRM, i.e. trying to create artificial scarcity. In the case of the gym it is because of the planning laws and other things that make it hard for there to be enough gyms. In the case of phones, it is because BT still has a strangle-hold over the lines.

Economically speaking, often the best thing to do is to avoid all such arrangements where possible, e.g. buy a nice phone up front and use VOIP where possible, invest in a bike, etc.

Where enforced, the fees aren’t actually about joining as such: their point is to discourage you from leaving. Without a joining fee, if you’ve not been going to the gym for a while, or know in advance that you’ll be busy, you might as well stop and re-join later. With the joining fee people feel it’s better value to keep on paying if they might later get round to using the gym again…